ImaginativePRO Blog

DONALD TRUMP'S FEDERAL INCOME TAX RETURNS FOR YEARS 2015-2020

The House Ways and Means Committee on Friday, December 30, 2022, released redacted versions of six years worth of former President Donald Trump's federal tax returns, ending Trump's years-long effort to keep his returns from the public. 

The Democratic-led committee voted last week to make Trump's tax returns public, then released two reports, one from its members and another from the Joint Committee on Taxation, noting that the IRS did not audit Trump the first two years he was in office. The move to publicize the returns comes days before Republicans take control of Congress in January. 

The publicized returns offer a more detailed account of the former president's financial portrait in the years he was running for and in office. 

The report from the Joint Committee on Taxation, or JCT, said Trump paid no federal income tax in 2020, the final year of his presidency. The former president paid a net of only $750 in income taxes in 2017. He paid $1.1 million in net federal income taxes combined in 2018 and 2019. 

WHY HAS DONALD TRUMP FOUGHT SO HARD TO KEEP HIS TAX RETURNS SO SECRET?

The Supreme Court’s rejection Monday, February 22, 2021 of an attempt by Donald Trump to keep Manhattan District Attorney Cyrus Vance from seeing his tax returns (and other financial documents) was rightly cast as a major legal setback for the former President.

But buried in that conclusion is this nagging question: What is Trump so afraid of? As in: Why has he fought so incredibly hard for the past five-plus years to keep anyone from seeing his taxes?

Remember that Trump’s view on releasing his tax returns was not always what it is today.

“If I decide to run for office, I’ll produce my tax returns, absolutely,” Trump said in 2014. “And I would love to do that.” The following year, Trump told conservative radio talk show host Hugh Hewitt: “I would certainly show tax returns if it was necessary.”

In January 2016, Trump was still dangling the possibility of releasing his returns. “I have very big returns, as you know, and I have everything all approved and very beautiful and we’ll be working that over in the next period of time,” Trump said on NBC’s “Meet the Press.” “Absolutely.”

But then something changed. By February 2016, Trump, who was starting to look more and more like the GOP presidential nominee, was starting to backtrack on his previous promises. “We’ll make a determination over the next couple of months,” he told CNN’s Anderson Cooper in an interview that aired on February 24, 2016. “It’s very complicated.”

By the following day, Trump had found his excuse for not releasing his returns; “I get audited. And obviously if I’m being audited, I’m not going to release a return,” he said. “As soon as the audit is done, I love it.”

That, of course, is a flimsy excuse – since there is no law against any person releasing their tax returns while under audit. (Richard Nixon did it while he was in the White House.) The “audit” – which apparently is still going on! – was simply a convenient cover for a decision Trump made sometime in late January or early February 2016: That releasing his returns would be far more politically damaging than the negative publicity he would take for not releasing them.

Trump became the only major party presidential candidate in the post-Watergate era to never release any of his tax returns.

(Sidebar: My strong sense is that when Trump was saying he would release his taxes in the early days of the campaign, it was one of many empty promises he made – assuming that he would never be a serious candidate and/or be called on his various pledges.)

So if an ongoing audit wasn’t – and isn’t – the real reason that Trump has fought so hard to keep his taxes secret, what is? Thanks to The New York Times having obtained a large number of Trump’s past tax records, we now have the ability to answer – or at least make an educated guess – about the answer.

The most likely reason for Trump’s reluctance to release his taxes is that they would reveal two facts:

1) He didn’t pay any taxes for years and years

2) He has massive debts

Let’s take the first point, er, first. Here’s what the Times’ reported about Trump’s taxes:

“Mr. Trump paid no federal income taxes in 11 of 18 years that The Times examined. In 2017, after he became president, his tax bill was only $750.”

How? Well, in large part, by claiming more than $900 million in losses on his 1995 tax return, which could have allowed him to avoid paying taxes for decades. Trump also aggressively sought to lower his taxable income, including claiming a $72.9 million tax refund that remains under investigation by the IRS. As the Times’ David Leonhardt wrote: “Over the past two decades, Mr. Trump has paid about $400 million less in combined federal income taxes than a very wealthy person who paid the average for that group each year.”

Now to Trump’s debts. And again, Leonhardt:

“In 2012, he took out a $100 million mortgage on the commercial space in Trump Tower. He has also sold hundreds of millions worth of stock and bonds. But his financial records indicate that he may have as little as $873,000 left to sell.

“He will soon face several major bills that could put further pressure on his finances.

“He appears to have paid off none of the principal of the Trump Tower mortgage, and the full $100 million comes due in 2022. And if he loses his dispute with the I.R.S. over the 2010 refund, he could owe the government more than $100 million (including interest on the original amount).”

Trump’s refusal to release his taxes during the 2016 campaign is likely explained by the first point. It’s not exactly endearing to voters when a wealthy person paid somewhere between very little and nothing in taxes for years. His considerable debts – and the questions about whether or not he will be able to pay them – are likely the driving force for why Trump continues to work to keep his returns private. If everyone knows he’s in debt and with few options to get out of it, he loses any leverage he might have to go to the financial institutions he owes money to and renegotiate the terms of the loans.

Trump always acts out of self-interest. And he is purely transactional in all of his dealings. His shifting stance on the release of his returns – and his ongoing battle to keep them private – is reflective of both of those points. Trump knows the details of the returns make him look bad and potentially kill any remaining leverage he has to dig himself out of the financial hole he is currently in. And so, he fights like hell to keep them secret.

WHO PREPARED DONALD TRUMP'S TAX RETURNS:

Former President Donald Trump's returns show he made substantial payments to his now-former accountant to prepare his individual tax returns. 

His 2015 return shows he paid $573,581 to accounting firm WeiserMazars LLP for "tax preparation fees" (On Jan. 1, 2017, WeiserMazars changed its name to Mazars USA). Donald Bender, who worked on Trump's personal and business taxes for four decades, is listed as the "paid preparer" on Trump's 1040 tax return that year.

In 2016, Trump's tax preparation fees more than doubled — he paid $1,295,385, also to WeiserMazars, and Bender again prepared his tax returns for that year. 

Subsequent returns released by the House Ways and Means Committee don't reveal the tax preparer fees. This is likely because the tax law passed by Congress in 2017 and signed by Trump in the first year of his presidency eliminated the deduction for personal tax preparation. The fees can still be deducted from business tax expenses, but the line-item deduction can no longer be used by individual taxpayers.

DOWNLOADS:

To DOWNLOAD a copy of the Report To The House Committee On Ways And Means Chairman Richard Neal regarding former #POTUS Donald Trump's income tax returns for the years 2015-2020 you can do it here:

https://int.nyt.com/data/documenttools/jc-treport-full/f668ccce9e46c975/full.pdf

To DOWNLOAD a copy of former #POTUS Donald Trump's IRS 1040 for the years 2015 through 2020 you can do it here:

https://www.cbsnews.com/live-updates/trumps-tax-returns-released-today-2022-12-30/

COMMENTARY:  I am not a tax expert and make no opinions or take any responsibility (financial or otherwise) regarding the accuracy or authenticity of former #POTUS Donald Trump's federal income tax returns.        

Courtesy of an article dated December 30, 2022 appearing in  CBS News and an article dated December 30, 2022 appearing in the New York Times and an article dated February 23, 2021 appearing in The Point by CNN Politics 

 

 

FACEBOOK CEO MARK ZUCKERBERG FACES A HUGE $1 BILLION INCOME TAX BILL FOR FACEBOOK SHARES HE SOLD DURING THE IPO

Mark Zuckerberg, CEO of Facebook Inc (NASDAQ:FB) has an estimated tax bill of approximately $1.1 billion for 2012 based on its current wealth on paper valued at around $13 billion according to report from CNN Money.

Stacey Cowley of CNN Money reported that Zuckerberg’s decision in May to increase its interest in the social network giant resulted to the billion-dollar tax bill. During the initial public offering of the Facebook Inc (NASDAQ:FB), Zuckerberg exercised his stock option acquired 60 million shares at a “strike price” of $0.06 per share.

Although Zuckerberg did sell the shares he acquired, the Internal Revenue Service (IRS) considers it as an ordinary income during the time when he exercised his stock option. The underlying principle behind the stock option is the fact that it is a form of compensation similar to a regular salary.

CNN Money estimated that Zuckerberg earned almost $2.3 billion last year from his stock options alone. Based on the 2012 federal tax rate at 35% and California tax rate at 13.3%, Zuckerberg’s total tax rate is 48.3 %, before deductions and other income he received in 2012.

For Zuckerberg, that means reporting income last year of nearly $2.3 billion from his stock options alone. Add together the top 2012 federal tax rate of 35% and the top California rate of 13.3% — the highest in the nation — and you get a total tax rate of 48.3%.

Only the IRS and the California Tax Board knew the actual income reported by Zuckerberg in his tax return, but according to the certified public accountants consulted by CNN Money who computed the figures believed that Zuckerberg’s tax bill for 2012 is probably more than $1 billion.

Toby Johnston, a partner at tax firm Moss Adams LLP in Silicon Valley said,

“With numbers that large, it’s usually capital gains, not ordinary income.”

Last year, investors who made profits from their investments paid a lower tax rate in the previous tax year compared in 2012.  The highest federal capital gains rate in the previous tax year was 15% and it is expected to increase to $23.8 percent this year.

Every year, the IRS releases a list of 400 U.S. tax filers with the largest reported incomes. In 2009, the average income of top earners was $202 million and their federal income tax bill was $41 million.

During the Facebook IPO, Zuckerberg sold 30.2 million shares for a total price of $1.135 billion. In a regulatory filing, he stated that he would use a substantial amount of the proceeds to pay for taxes on his stock option purchase.

COMMENTARY:   Zuck will probably cash in some of his other shares and pay that tax bill or borrow the money at a low interest rate.  It is my understanding that Zuck and his wife Priscilla are two of the most benevolent philanthropists, and have donate millions to needy causes, so I am sure he has some deductions that will reduce that tax bill.  Zuck's tax problems stem from the over-priced Facebook shares at te time of the IPO, $38.00 or thereabouts. Inflated as they were, Zuck got full price for those Facebook shares.  Today those same shares are trading for $25-$26 per share, and from the look of things, continue to decline as I write this post.   

Courtesy of an article dated March 28, 2013 appearing in ValueWalk

 

 

WHY IS WILLARD MITT ROMNEY REFUSING TO DISCLOSE HIS OFFSHORE TAX HAVEN INVESTMENTS?

Republican POTUS candidate Willard Mitt Romney does a stump speech at Ormond Beach, Florida in January 2012.  God he looks good in designer jeans (Click Image To Enlarge)

Republican presidential challenger Wilalrd Mitt Romney shed dozens of stocks and holdings in various foreign companies in the last 10 months, beefing up his cash reserves while maintaining an overall fortune as high as $250 million, according to personal financial disclosures he filed Friday, June 2, 2012.

The disclosure — required of presidential candidates — showed that the GOP nominee's net worth has not changed greatly since September 2011's financial disclosure, when he reported his assets were worth between $190 million and $250million.

President Obama, meanwhile, reported in May 2012 that his assets are between $2.6 million and $8.3 million.

Most of the money held by Willard and his wife, Ann, is locked up in investments administered through two blind trusts established in 2003 after he was elected governor of Massachusetts. The trusts are stocked with debt securities, hedge fund investments and other complicated financial instruments — some of them based overseas — that date from his tenure running Bain Capital. Those Bain funds produced income between $720,000 and $6.3 million.

Andrea Saul, a Romney campaign spokeswoman said. 

"They do not control the investment of these assets, which are under the control and overall management of a trustee."

One of the biggest shifts in Romney's portfolio in the last year was his divestment of dozens of stocks, boosting his cash reserves to at least $6.4 million.

Two separate investment fund managers decided independent of Romney to shed nearly all of his stocks, the filing states. Among those sold were his holdings in Coca-Cola, Procter & Gamble and Apple. Romney held on to three U.S. stocks: at least $250,000 worth of shares in Ford Motor Co., at least $1,000 in

Marriott Vacations Worldwide and at least $100,000 in Marriott International, where he served as a director from January 2009 to January 2011.

He dumped his extensive foreign stock holdings, which included Wal-Mart de Mexico — now the subject of U.S. inquiries into bribery allegations — as well as several publicly traded firms in China. Romney has been a harsh critic of China's trade policies.

In several of his fund holdings, Romney provided no information on the underlying investments. His report said that his fund managers asked for that information, but were told it was "confidential and proprietary." That included Solamere Founders Fund, a private equity fund run by his son Tagg Romney.

The campaign said a third trust for the Romney children, not listed in the disclosure, was worth $100 million.

The royalties for Romney's 2010 book, "No Apology: The Case for American Greatness," dipped to between $50,000 and $100,000. Last year, the royalties came in between $100,001 and $1million. Romney has donated the profits to charity, according to the disclosures.

The filings do not allow for a precise calculation of Romney's fortune. In January, he pegged his net worth at "between 150 [million] and about 200 and some odd million" dollars during an appearance on Univision. A recent analysis of his holdings by Forbes estimated his fortune to be worth $230 million.

Such wealth would make him among the richest occupants of the White House — a group that includes George Washington, whose net worth, adjusted to today's dollars, may have been as much as $500 million because of his land holdings.

Romney's riches have presented obstacles for him on the campaign trail, particularly in the GOP primaries, when rival Newt Gingrich cast him as out-of-touch with the average voter. Under pressure, Romney released his tax returns in January for the first time, providing a glimpse inside the complicated architecture of his far-flung holdings.

During the last two years, the Romneys paid about $3 million in federal taxes annually on an income of about $21 million, largely derived through capital gains and dividends, the returns showed.

In 2010, the Romneys reported a gross foreign income of $2.7 million, the best measure of how much they gained from international investments that year.

His campaign said that Romney gains no tax benefit from his overseas investments.   However, a Vanity Fair article published this week revealed that Mitt Romney has heavily invested in foreign tax havens, raising questions about whether he's ever avoided paying U.S. taxes.

We already knew that he had a Swiss bank account until just last year, and that he still owns a mysterious corporation in Bermuda. The article notes that Romney's finances are "deeply entangled" with Bain Capital, including investment funds in the Cayman Islands. We don't know all the details because he won't follow precedent by releasing his tax returns, raising a lot of questions about his finances that Americans deserve to know the answers to. Take a look at this map of Romney's known investments in offshore tax havens, and make sure others see it, too:

  

Click Image To Enlarge

COMMENTARY:     I would love to know what Willard's foreign investments are don't you? When I think of foreign tax havens, I think Caymen Islands.  If you watched Tom Cruise in the film, "The Firm," you know what I mean.

With respect to Romney's foreign investments and bank accounts, Reuter's said.  

"Romney advisers stressed that the holdings in the Caymans — along with those in a Swiss bank account that was closed in 2010 after an investment adviser decided it could be politically embarrassing to Romney — were reported on tax returns and were not vehicles to avoid taxes."

Under intense pressure from Republican house members, including former House Speaker Newt Gingrich and former Republican presidential candidate, Willard finally released his 2010 tax return and estimated for 2011.  Here are a few highlights.

• Willard and wife Anne had combined income of $42.6 million over the past two years (2010 and 2011). 
• Most of Willard's income came from capital gains on investments.   
• Willard paid $6.2 million in taxes over the past two years-- about $3 million was for 2010 and $3.2 million for 2011.
• Willard made $7 million in charitable contributions over the past two years, including at least $4.1 million to the Church of Jesus Christ of Latter-day Saints (Mormon Church).
• Willard's effective tax rate for 2010 was 13.9%.
• Willard's effective tax rate for 2011 is expected to be 15.4%   

Willard's effective tax rates for the last two years is lower than the vast majority of U.S. taxpayers. By comparison,  POTUS Barack Obama and Newt Gingrich's effective tax rates were 25% and 31% respectively.  

The Washington Post's Wonkblog looked at some historical data and found that Sen. John Kerry paid a 13.1 percent tax rate in 2003 and President Bill Clinton paid an 18.9 in 1990.

It's worth noting that Romney not only pays an effective tax rate that is lower than some middle-class Americans but he also pays a lower effective tax rate than most of his fellow millionaires.

The Tax Foundation reports had this to say:

"By contrast, millionaires pay an average rate of 25 percent. Although taxpayers earning between $2 million and $5 million pay an average tax rate of 26 percent, while those earning more than $10 million pay an average of 22 percent. We can speculate that one of the reasons for this is that much of their overall income comes from capital gains, which is taxed at 15 percent (only 20 percent of the total AGI for these $10 million-plus taxpayers is from salaries). However, even with this "preferential" tax rate on capital gains, the data clearly shows that their overall average tax rate is at least twice that of the nation as a whole."

Romney has vehemently defended his wealth and his tax rate, saying,

"I will not apologize for being successful."

During a late January debate, Romney added responded to questions about his tax returns:

"My tax bill is entirely legal and entirely fair.  You'll see my income, how much taxes I've paid, how much I've paid to charity.  I pay all the taxes that are legally required and not a dollar more. I don't think you want someone as the candidate for president who pays more taxes than he owes."

As a Republican taxpayer, wouldn't you want to know that your candidate for POTUS is paying ALL income taxes on domestic AND foreign investments.   As reflected in the above, the precise value and nature of the majority of Willard's foreign investments is still unknown.   If those foreign investments did not generate income, we all still deserve to know the nature of those investments, the value of those foreign investments, and if there were any losses.  

Willard needs to come clean, and clearly demonstrate that he is abiding to U.S. foreign tax regulations and NOT making those foreign investments in order to avoid income taxes on that income.  

If by happenstance Willard were to be elected POTUS (God forbid), we all deserve to know that he is honest and not willfully evading income taxes on his foreign investments.  Tax evasion is a serious felony, punishable by fines and penalties and five years imprisonment, and it is also an impeachable offense.  We all know how terrible dragging a POTUS through impeachment would be. I am jumping ahead of myself, of course.  Willard has not been elected POTUS yet, but I dare ask,

"Would a Republican (hopefully changed to Democratic) dominated House of Representatives pursue impeachment proceedings against their own POTUS?"        

When I heard that Willard had foreign investments in Bermuda, Cayman Islands, Switzerland and Luxembourg, and that those countries are known for their secrecy when it comes to protecting the identify of bank depositors, and have reputations as tax havens for the rich, I get a queezy feeling in my gut.   I know one thing, if POTUS Obama had similar foreign investments, the House of Representatives would be demanding full disclosure, yet I have not heard shit from those punks in Congress. Kind of makes you wonder if our politicians have similar foreign investments, and just don't want to stirup a hornet's nest. 

Courtesy of an article dated June 2, 2012 appearing in the Los Angeles Times and the Obama-Biden website and an article dated January 24, 2012 appearing in NPR